On 17 March, the Gaidar Readings – Regional Banking Sectors amid the Crisis: Outputs of Research in Banks of the North-Eastern Federal District – were held in Veliky Novgorod.

The moderator of the first plenary session was Sergei Prikhodko, Executive Director of the Gaidar Institute. The debates were opened by the Academic Director of the Gaidar Institute who delivered a report “Factors behind the Crisis and Russian Economic Forecast in the Mid-Term Prospect”.

In his report: New Rationality on the Global Financial Market and the Policy of the Russian Central Bank, Pavel Trunin, Senior Researcher of the RANEPA’s Department of Research in Central Banks’ Policies touched upon the prospects of the monetary policy of the Central Bank.

Pavel Trunin pointed out that households’ inflationary expectations remained high at the level of over 15%. It is to be noted that spending of resources of the Reserve Fund and the National Welfare Fund, as well as recapitalization of banks created monetary prerequisites for inflation. In its turn, prevalence of a high rate of inflation for a long period of time complicates reduction of the inflation rate due to inflationary inertia.

A high rate of inflation will create a downward pressure on the exchange rate of the ruble. Reduction of the key rate results in cuts in interest rates on deposits with commercial banks and such a situation leads to a decrease both in ruble savings and demand on rubles. So, a reasonably tight monetary and credit policy aimed at reduction of the rate of inflation is required to maintain a macroeconomic stability, concludes Pavel Trunin.

Presentation to P. Trunin’s report>>>

Within the frameworks of the first session, participants in the debates were as follows: Andrei Belykh, Director for Operations with Large Corporate Customers of the Bank of St. Petersburg delivered a report on Customer and Lending Policies of Banks amid Crisis; Oksana Pritula, Head of the Department of Economics and Finances of the RANEPA’s Novgorod Branch spoke about the prospects of development of the economy of the Novgorod Region; Tatyana Makarova, First Deputy to the Chairman of the Board of the ОАО UKB Novobank touched upon new lines of activates and results of the OAO UKB Novobank’s operations as a regional bank; Alexei Kostyukov, Manager of the Novgorod Region Pension Fund Office delivered a report on the RF Pension Fund’s Experience in Networking with Banking Institutions on a Regional Level; Natalia Omarova, Head of the Department of Finances of the Yaroslav Mudry Novgorod State University delivered a report on Innovation Ratings of Russia and Investment Marketing instruments.

Presentation to T.Makarova’s report>>>

Presentation to A.Kostyukov’s report>>>

Presentation to N. Omarova’s report>>>

Presentation to O.Pritula’s report>>>

Speaking within the frameworks of the second session, Mikhail Khromov, Director for the Structural Research Center pointed out in his report: The Topical Issues of the Russian Banking Sector: Results of 2015 and Expected Risks of 2016 that the financial result of the banking sector still remained highly unstable. In 2015, after-tax profit fell six times over as compared to 2014. A decrease in profitability of regular banking operations made the main contribution to losses. In 2015, profitability of the banking capital was below the level of the 2008–2009 crisis.

Presentation to D. Zhorov’s report>>>

In 2015, direct dependence of the banking sector on the monetary authorities’ funds fell by Rb 4 trillion or from 11% to7% of the total liabilities. At the same time, the government’s expenditures on capitalization of banks are growing and have already exceeded Rb 1 trillion.

   

Households’ consumer lending debt had been falling from autumn 2014 due to a sudden slowdown of the rates of extension of new loans. It is to be noted that the quality of loans to individuals got worse from the beginning of 2013 due to a high debt burden on revenues. The quality of loans to non-financial institutions started to get worse from the beginning of the recession of the Russian economy late in 2014, but is short of the 2009 level in that segment.

Presentation to M. Khromov’s report>>>

The debates were continued by Yuri Kondrashin, Researcher of the Gaidar Institute who delivered the report: Credit Institutions of the North-Eastern Federal District: Specifics of Operation and Prospects of Development.

Presentation to Y.Kondrashin’s report>>>

The speakers at the second session were as follows: Dmitri Zhorov, Manager of the Sberbank’s Novgorod Office No.8629; Denis Kazakov, Director of the Novgorod Regional Branch of the AO Rossiisky Selskokhozyastvenny Bank; Grigory Tomchin, President of the Fund for Support of Legislative Initiatives (Report: The Role of Regional Banks in Development of Small and Mid-Sized Businesses; Yevgeny Bogdanov, Head of the Department for Economic Development of the Novgorod Region.